Digital Music Revenues Grow 8% in 2011

First rise in growth since 2004

28% of internet users still access unauthorized services

The digital music industry grew 8% last year showing the first growth since the inception of the measurement of the digital market in 2004.

Edger Berger, President and CEO International at Sony Music Entertainment, says that even Germany, the third largest market in the world, is stable for the first time in 15 years. Subscription rates are up 67 percent from 8 million users globally to 13.7 million people actually subscribing and paying for their music. Frances Moore, IFPI CEO, has started using the word momentum when talking about the large amounts of legal music distribution systems appearing in the world in the last 12 months alone. While the industry growth is up, sales are still down due to 28 percent of the internet population still using illegal methods of acquiring music material.

Full transcript below the video.

Bob

~Full Transcript~

The annual report on the state of the music industry is out and the verdict is surprisingly upbeat. Digital music revenues grew 8 percent in 2011, reaching an estimated 5.2 billion dollars according to the IFPI’s Digital Music Report. The beats the 5 percent growth posted in 2010 and marks the first time the year on year growth rate has risen since the music industry body began measuring the digital market in 2004. IFPI CEO Frances Moore has even started using the word momentum. SOUNDBITE: Frances Moore, IFPI CEO saying (English) “Well we’ve seen the spread of legal services. 23 legal services at the beginning of 2011. Here we are, 12 months later, the leading services are in 58 countries. The consumers, whether it’s downloading or subscriptions, we’ve seen consumers moving towards more legal services.” The president of global digital business at the world’s largest music label Universal Rob Wells says music subscription services such as Spotify and Deezer had a breakthrough year in 2011. SOUNDBITE: Rob Wells, President, Universal Music Global Digital Business saying (English) “The last 12 months have been significant for the music industry, especially the digital portion of the music industry. We have significant growth in subscriptions – 67 percent growth year on year, up from 8 million to now globally 13.7 million people paying for their music through subscription. The a la carte business is also growing so neither one of the two businesses are currently driving in each other’s lane.” Technology Correspondent Matt Cowan saying “While digital sales and subscriptions showed strong growth in 2011, it was still not enough to offset the loss of revenues from falling physical sales. Final numbers are not yet in for last year but it looks like a dropoff overall of about three percent. However even that is being talked about with a note of optimism. It is the slowest decline since 2004.” While no one is yet saying the music industry has turned a corner, there is growing hope that point is not too far off. Edgar Berger is the president and CEO of Sony Music International business. SOUNDBITE: Edgar Berger, president and CEO International at Sony Music Entertainment saying (English): “If you look at the biggest market, which is the U.S., it grew. If you look at the third biggest market which is Germany, it was stable for the first time since 15 years. Other markets like Sweden and Brazil growing. In the UK, Adele 21 was the most bought album in one calendar year ever. It shows that music sells.” Still, the IFPI estimates that 28 percent of internet users access unauthorised services on a monthly basis and says more action must be taken to combat piracy. Matt Cowan, Reuters